The Independent Authority Against
Corruption of Mongolia issued a press release on May 11, 2012.

About the Authority
The Independent Authority Against Corruption of Mongolia (IAAC) was established
in 2006 following the passage of the Anti-Corruption Law by Parliament in
2006. The creation of the IAAC is the result of longstanding initiatives
to crack down on government corruption and ensure transparency and
accountability in government. The Government of Mongolia (GoM) has
undertaken a number of initiatives to fight corruption during the past
decades. For example, The Parliament approved a National Program for
Combating Corruption (NPCC) in 2002. Subsequently, a National Anti-Corruption
Council (NACC) was established to oversee the implementation of the NPCC. In
October 2005, the Parliament ratified the United Nations Convention against
Corruption (UNCAC). The process of revising national laws and regulations to
comply with UNCAC is underway. In August 2007, Mongolia’s Criminal
Procedures Code was amended and the IAAC was added to the list of state bodies
authorized to conduct investigations and either bring charges against
government officials or absolve them of wrongdoing.

Oversight and Resources
The IAAC reports to the parliament each year and is subject to oversight by the
Attorney General’s Office under the Criminal Procedures Code. The IAAC is
designed to be a coordination center that brings together investigations,
intelligence, asset disclosure, and public awareness to ensure the integrity of
Mongolia’s government and bureaucracy. The IAAC is comprised of approximately
90 professional staff members ranging from accountants and investigators to
researchers. The annual budget is $1.65 million.

Charges against Mr. Enkhbayar Nambar, the former President of Mongolia.

• On 12 April 2012, Mr. Enkhbayar
  was formally arrested and charged with government corruption under the
  Mongolian Criminal Code.
• Mr. Enkhbayar.N, jointly with a
  few other government officials, stands accused of felonies consisting of
  the following five allegations involving misuse of government power and
  others’ property:

1. Misuse of capital city property
“Urguu Hotel” for a personal gain.

On 17 August 2007, the Mayor of the Capital City, Mr. Batbayar.Ts (currently a
MP), submitted a proposal to the Capital City Representatives’ Hural (City
Council) to establish a joint company by inviting private investment into the
“Urguu Hotel” State Enterprise. The Presidium of the City Council accepted the
Mayor’s proposal with the condition that the private investor should be
selected through an open bidding process. However, Mr. Batbayar.Ts, the former
Mayor did not organize an open bidding process as required. Instead, he
dismantled the “Urguu Hotel” State Enterprise and proposed to establish a new
joint company “Dun Urguu”. The Capital City Council adopted Batbayar’s new
proposal and the “Dun Urguu” Joint Company was established on 10 October 2007.
But the Dun Urguu Joint Company’s private partner “Har Dun” company ended up
owning 75% of the new joint company, while “Har Dun” company itself was
established just 10 days before the establishment of the joint company and had
only one member and with only a one million tugriks charter fund (less than
$1,000). The Director of “Har Dun” company, Mr. Huyag Buya was the sole owner
of “Har Dun”. Five days before “Har Dun” company was approved as 75% of
ownership of the “Dun Urguu” new joint company, it was subsumed as a daughter
company of “Remif” LLC by the order No.01/13 of Mr. Batshugar Enkhbayar (a son
of Mr. Enkhbayar Nambar), director of Remif LLC. “Remif” LLC became a daughter
company of “Escon” LLC founded by Mr. Enkhbayar Nambar in 2010. As a result,
the capital city property “Urguu Hotel”, with a market value of 605,000,000
tugriks (USD600,000) in 2007 was misappropriated by Mr. Enkhbayar Nambar for
his personal gain.

2. Misuse of Capital City property “Printing House” for personal gain using
unlawful privatization: The capital city property “Printing House” is a large
historic building sited approximately 50 meters in the east of Government
House, as the most expensive real estate area of Ulaanbaatar. In 2008, the
building was occupied by the “Ulaanbaatar Times” newspaper and its management
team had a contract with the Capital City for use of the property. On 08
September 2008, the Capital City Privatization Commission issued the Resolution
No.75 to privatize the building and sell it to the “Ulaanbaatar Times”
management team at 369,724,000 tugriks (approx.USD350,000). However, the
“Ulaanbaatar Times” management team had not fulfilled their contractual
obligations and had unpaid debts, it was unlawful to privatize the property to
sell it to the management team. Moreover, as the stated market value of the
property in August 2008 was 2,125,000,000 tugriks (approx. USD 2.0 million),
the loss from the privatization was over 1.7 billion tugriks. The
“Ulaanbaatar Times” management team lead by Mr. Chuluunbaatar Dolgor received
500 million tugriks from the “Media Holding” Company as an investment when the
team bought the building at privatization. The “Media Holding” company lead by
Ms. Enkhtuya Nambar, a sister of Mr. Enkhbayar Nambar, immediately became a 49%
of owner of this privatized building. Later, in 2010, “Media Holding” Company
became a daughter company of “Escon” LLC founded by Mr. Enkhbayar Nambar.

3. Misuse of a gift addressed to Mongolian Buddhist for personal gain:
Mr. Enkhbayar Nambar, while serving as the Chairman of the MPRP caucus in the
parliament, visited to Japan in early February 2000. The Buddhist center
“Agonshu” based in Kyoto, Japan, hosted him at a religious ceremony and donated
of 11 kinds of 46 sets of television equipment for the purpose of establishing
a television station by Gandandegchilen Monastery. According to the Customs
declaration, the donation valued USD 113,453.21. However, Mr. Enkhbayar.N
misused the gift for his personal gain instead of conveying the television
equipment to the Gandandegchilen Monastery.

4. Caused significant loss to Mongolian International Air Transport (MIAT)
Company by misusing government power: During his tenure as the President of
Mongolia, Mr. Enkhbayar Nambar, used the state owned airline MIAT to transport
his newly printed eight volumes of books.for free of charge from Korea to
Mongolia,

5. Letting others to misuse “Erdenet Factory” LLC and caused the state
extremely large amount of loss using his and their official powers: Mr.
Enkhbayar Nambar, repeatedly ordered the leadership of “Erdenet Factory” to
provide preferential treatment to make contracts on purchasing steel balls and
other materials from Mr. Myagmarjargal.J, who was the director of both “Hinlon”
LLC and “Great Global International” LLC. Even though Mr. Myagmarjargal.J repeatedly
failed to meet his contract obligations, Mr. Enkhbayar Nambar continued to give
pressure to the “Erdenet Factory” LLC; thereby enabling others to misuse the
USD3,356,369 contracted advance for personal gain and causing extremely
significant loss to the State.

• At the investigation stage, the
  Agency filed charges against Mr. Enkhbayar.N under the provisions 150.3
  and 263.2 of the Criminal Code. These provisions are subject to change by
  the Prosecutors, if they find the charges are too light or too heavy.
• The provision 150.3 of the
  Criminal Code or the crime of “misusing and mishandling others’ trusted
  property by causing significant or extremely significant damage to others”
  is to be punished by confiscation of property and 5-10 years of imprisonment.
• The provision 263.2 of the
  Criminal Code or the crime of “repeatedly misusing government power by a
  government official and causing significant damage and loss” is to be
  punished by barring the right to work for the government for a period of
  up to 5 years and fining with an amount of 51-100 times of the monthly
  minimum wage, or up-to 5 years of imprisonment.

Investigative Process/Timeline

• Over a year ago, the IAAC
  became aware of reports regarding the activities of Mr. Enkhbayar.N, while
  he held public office concerning illegal activities.
• After a preliminary
  investigation, the IAAC investigators found the reports credible and
  launched a formal investigation.
• Since May 2011, the IAAC
  contacted Mr. Enkhbayar.N for 10 times requesting him to appear for
  questioning. Each time, Mr. Enkhbayar.N refused IAAC investigators’
  requests. 
• Because of Mr. Enkhbayar’s
  refusal to appear, IAAC investigators, acting within the law, submitted a
  request for his arrest to the prosecutor’s office. According to the Law on
  Criminal Procedure, the prosecutor’s office verified the legitimacy and
  grounds of the Agency’s request and conveyed it to the Sukhbaatar District
  Court. An order for the arrest and detention of suspect Mr.Enkhbayar
  beginning from April 12, 2012 was issued by a Sukhbaatar District Judge.
• The Agency and the Police
  officers who came to arrest Mr.Enkhbayar on the evening of 11 April 2012
  faced several serious obstructions to justice. Some actions were taken to
  overcome the obstructions. For example, during his arrest one of Mr.
  Enkhbayar’s bodyguards was disarmed after brandishing a firearm and
  pointing it at law enforcement authorities. Currently, several citizens,
  including Mr. Enkhbayar’s bodyguard who was aimed a firearm at law
  enforcement officer, is being investigated by Khan-Uul District Police.
• Mr. Enkhbayar, when requested
  to obey the Sukhbaatar District Judge’s decision, refused to follow the
  order stating that he would not leave his home until forced to. Therefore,
  he had to be forcibly taken into custody after initially fleeing from law
  enforcement.
• Due to multiple layers of
  obstructions to the law enforcing process, the Sukhbaatar District judge’s
  decision wasn’t read to Mr. Enkhbayar during his arrest. Police’s usual
  procedure was standing in front of the suspect and orally reading the
  Court decision before it makes an arrest. However, this procedure could
  not be fulfilled during Mr. Enkhbayar’s arrest owing to the actions of his
  scores of bodyguards endeavoring to interfere with the arrest. However,
  the Judge’s decision was conveyed to him and his lawyers, namely, Mr.
  Ganbaatar.B and Mr. Shinen.B, on the same day and it was informed them and
  him of the nature of the charges against him. 
• Mr. Enkhbayar was immediately
  allowed access to legal counsel and continues to have full access to legal
  representation. Since 13 April 2012, he is being represented by attorney
  Mr. Baasankhuu.O and four other attorneys. All of his rights under
  Mongolian’s constitution and legal code have been, and will be, respected. 
• Because some of the suspects of
  the same crime were detained in Ulaanbaatar Houses of the Court Decision
  Enforcement Office, Mr.Enkhbayar was jailed in nearby Tuv Province in
  order to separate him from the other suspects and accused. Tuv Province
  jail is located south of Ulaanbaatar and can be reached by car in 40
  minutes. The detention center’s doctor examined Mr. Enkhbayar’s upon his
  arrival and found no pain, wound or injury to his person. 
• The Independent AgencyAgainst
  Corruption has submitted an investigation file number 21147024 to the
  Capital City Prosecutor’s Office on May 7, 2012. The case involves five
  criminal actions and two charges concerning Mr. Enkhbayar Nambar and other
  government officials.